You may not have spotted it but Jamie Dimon, the CEO and Chair of JPMorgan, who was dressed down in t-shirt and jeans, made a recent appearance at a tech summit on AI organised by Databricks. The 40-minute interview is over here on YouTube, and took the form of a fireside chat with Ali Ghodsi, CEO of Databricks.
An his intro, Ali stresses that JPM is a bank with 300,000 staff and an $18 billion IT budget. That’s a good start.
Jamie replies that the bank operates in over 100 countries around the world with more than 30 data centres, which are constantly being upgraded, and around 55,000 programmers. The bank moves $10 trillion a day around the world and buys and sells three trillion of securities every day … the bank is a big deal.
Obvs, being a data and AI conference, the conversation moved around to how Jamie sees the importance of AI and he talks about the fact that they’ve been involved for a long time, working with Palantir back in 2012 and creating a data analytics and AI area back in 2014. I blogged about this in April
talking about Teresa Heitsenrether, JPMorgan's Chief Data and Analytics Officer, who oversees the bank's AI strategy, and her colleague Manuela Veloa, who co-created the JPM AI development focus a decade ago. Both of them are on the leadership team of the bank.
In fact, critically, Jamie says that “we took AI/Data out of Technology. It's too important. We put it at the management table. The woman running AI & Data now reports to me and our President … [because] there will be no job, no function, nothing that won't be affected by [AI].”
Darn right there Jamie, you nailed it.
Question: how many banks have a Chief of AI reporting to the CIO?
Most banks I meet, the CIO reports to the CFO who reports to the CEO and so the CAI would naturally be under the CIO, and at least three layers away from the decision maker. What sort of messed up 21st century organisation would work that way?
Specifically, Dimon makes the point that the bank is spending $2 billion this year on their AI developments*. That’s more than 10% of their tech budgets going into innovation based on AI. Surely, with that exposure, you need the leader of those AI developments to have access to the CEO’s ear, especially when you are talking of several thousand use cases?
Then, as Jamie says, “the hardest part is getting … all the people who run these businesses to understand the power of it”. What he means is that you have 300,000 people running multiple lines of business. How can you persuade them all to understand what AI can do for them in these thousands of different applications?
I guess the first steps are to implement, and Jamie casually mentions that they have 200,000 people using LLMs (Large Language Models) on their internal data. Sounds good? Well, yes and no. It means that the bank’s staff “know where you shopped and what you bought and what you did how you spend your money where you travel what restaurants you like to eat” and more.
On the one hand, that allows better and more personalised service; on the other, it means you have no privacy.
He does make the point that they are integrating internal and external data, but the former cannot be accessible to all as it is regulated. This, for me, is a critical point. Internal bank data is the motherlode of a bank. That rich knowledge of all of your digital financial footprint – whether you are a consumer or corporate – is the diamond (not Dimon) of banking.
Dimon then goes on to say that “getting the data in the form that it could be usable” is the other hard part, and I totally agree. You can’t be smart with dumb data. Have I said this before?
The thing I love about this chat is that I’m totally on board with Jamie Dimon and have been for years. He gets tech. That’s why JPM has succeeded. It succeeds by using tech to make a better bank. As Jamie says, “use technology to do a better job … if you don’t you’ll be left behind”.
Equally, he’s a leader. When asked about leadership late in the interview, his response: “you have to create an environment where people feel treated with trust and respect, and they can contribute to the company to the best of their ability whatever they could be … and you should fire the assholes. It only takes a few of them to destroy a meeting … I hate to say this sometimes those include customers. I have fired customers because they are so rude to our people.”
Good for you Mr. Dimon. One of the few banking leaders who lead and so, if you can spare 40 minutes, it’s well worth watching this.
* in a throw-away line later he mentions that $1 billion a year is being spent on cybersecurity. This is an interesting segment, and I loved this quote: “if I had to tell you all how many times the failsafe systems didn't work in my life … almost every time”.
** Another quote I liked is that “the Fed has us do one stress test a year we do 100 a week. I mean literally I could care less about their stress tests.”
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...